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Supplemental Financial Information (Notes)
9 Months Ended
Oct. 02, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Supplemental Financial Information
Supplemental Financial Information
We fully and unconditionally guarantee the notes issued by our wholly owned operating subsidiary, Kraft Heinz Foods Company. See Note 12, Debt, to our consolidated financial statements for the year ended January 3, 2016 in our Annual Report on Form 10-K for additional descriptions of these guarantees. None of our other subsidiaries guarantee these notes.
    
Set forth below are the condensed consolidating financial statements presenting the results of operations, financial position and cash flows of Kraft Heinz (as parent guarantor), Kraft Heinz Foods Company (as subsidiary issuer of the notes), and the non-guarantor subsidiaries on a combined basis and eliminations necessary to arrive at the total reported information on a consolidated basis. This condensed consolidating financial information has been prepared and presented pursuant to SEC Regulation S-X Rule 3-10, “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or being Registered.” This information is not intended to present the financial position, results of operations, and cash flows of the individual companies or groups of companies in accordance with U.S. GAAP. Eliminations represent adjustments to eliminate investments in subsidiaries and intercompany balances and transactions between or among the parent guarantor, subsidiary issuer, and the non-guarantor subsidiaries.
The Kraft Heinz Company
Condensed Consolidating Statements of Income
For the Three Months Ended October 2, 2016
(in millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuer
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Net sales
$

 
$
4,206

 
$
2,233

 
$
(172
)
 
$
6,267

Cost of products sold

 
2,700

 
1,521

 
(172
)
 
4,049

Gross profit

 
1,506

 
712

 

 
2,218

Selling, general and administrative expenses

 
194

 
611

 

 
805

Intercompany service fees and other recharges

 
795

 
(795
)
 

 

Operating income

 
517

 
896

 

 
1,413

Interest expense

 
294

 
17

 

 
311

Other expense/(income), net

 
(20
)
 
17

 

 
(3
)
Income/(loss) before income taxes

 
243

 
862

 

 
1,105

Provision for/(benefit from) income taxes

 
(199
)
 
461

 

 
262

Equity in earnings of subsidiaries
842

 
400

 

 
(1,242
)
 

Net income/(loss)
842

 
842

 
401

 
(1,242
)
 
843

Net income/(loss) attributable to noncontrolling interest

 

 
1

 

 
1

Net income/(loss) excluding noncontrolling interest
$
842

 
$
842

 
$
400

 
$
(1,242
)
 
$
842

 
 
 
 
 
 
 
 
 
 
Comprehensive income/(loss) excluding noncontrolling interest
$
547

 
$
547

 
$
285

 
$
(832
)
 
$
547

The Kraft Heinz Company
Condensed Consolidating Statements of Income
For the Three Months Ended September 27, 2015
(in millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuer
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Net sales
$

 
$
3,963

 
$
2,285

 
$
(128
)
 
$
6,120

Cost of products sold

 
2,887

 
1,733

 
(128
)
 
4,492

Gross profit

 
1,076

 
552

 

 
1,628

Selling, general and administrative expenses

 
684

 
545

 

 
1,229

Intercompany service fees and other recharges

 
626

 
(626
)
 

 

Operating income

 
(234
)
 
633

 

 
399

Interest expense

 
447

 
13

 

 
460

Other expense/(income), net

 
(8
)
 
116

 

 
108

Income/(loss) before income taxes

 
(673
)
 
504

 

 
(169
)
Provision for/(benefit from) income taxes

 
(462
)
 
413

 

 
(49
)
Equity in earnings of subsidiaries
(123
)
 
88

 

 
35

 

Net income/(loss)
(123
)
 
(123
)
 
91

 
35

 
(120
)
Net income/(loss) attributable to noncontrolling interest

 

 
3

 

 
3

Net income/(loss) excluding noncontrolling interest
$
(123
)
 
$
(123
)
 
$
88

 
$
35

 
$
(123
)
 
 
 
 
 
 
 
 
 
 
Comprehensive income/(loss) excluding noncontrolling interest
$
(17
)
 
$
(17
)
 
$
(727
)
 
$
744

 
$
(17
)
The Kraft Heinz Company
Condensed Consolidating Statements of Income
For the Nine Months Ended October 2, 2016
(in millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuer
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Net sales
$

 
$
13,156

 
$
6,948

 
$
(474
)
 
$
19,630

Cost of products sold

 
8,273

 
4,704

 
(474
)
 
12,503

Gross profit

 
4,883

 
2,244

 

 
7,127

Selling, general and administrative expenses

 
778

 
1,787

 

 
2,565

Intercompany service fees and other recharges

 
3,320

 
(3,320
)
 

 

Operating income

 
785

 
3,777

 

 
4,562

Interest expense

 
782

 
42

 

 
824

Other expense/(income), net

 
66

 
(71
)
 

 
(5
)
Income/(loss) before income taxes

 
(63
)
 
3,806

 

 
3,743

Provision for/(benefit from) income taxes

 
(349
)
 
1,394

 

 
1,045

Equity in earnings of subsidiaries
2,688

 
2,402

 

 
(5,090
)
 

Net income/(loss)
2,688

 
2,688

 
2,412

 
(5,090
)
 
2,698

Net income/(loss) attributable to noncontrolling interest

 

 
10

 

 
10

Net income/(loss) excluding noncontrolling interest
$
2,688

 
$
2,688

 
$
2,402

 
$
(5,090
)
 
$
2,688

 
 
 
 
 
 
 
 
 
 
Comprehensive income/(loss) excluding noncontrolling interest
$
2,131

 
$
2,131

 
$
2,013

 
$
(4,144
)
 
$
2,131

The Kraft Heinz Company
Condensed Consolidating Statements of Income
For the Nine Months Ended September 27, 2015
(in millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuer
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Net sales
$

 
$
5,820

 
$
5,638

 
$
(244
)
 
$
11,214

Cost of products sold

 
4,157

 
3,944

 
(244
)
 
7,857

Gross profit

 
1,663

 
1,694

 

 
3,357

Selling, general and administrative expenses

 
986

 
1,019

 

 
2,005

Intercompany service fees and other recharges

 
619

 
(619
)
 

 

Operating income

 
58

 
1,294

 

 
1,352

Interest expense

 
973

 
82

 

 
1,055

Other expense/(income), net

 
121

 
193

 

 
314

Income/(loss) before income taxes

 
(1,036
)
 
1,019

 

 
(17
)
Provision for/(benefit from) income taxes

 
(573
)
 
557

 

 
(16
)
Equity in earnings of subsidiaries
(11
)
 
452

 

 
(441
)
 

Net income/(loss)
(11
)
 
(11
)
 
462

 
(441
)
 
(1
)
Net income/(loss) attributable to noncontrolling interest

 

 
10

 

 
10

Net income/(loss) excluding noncontrolling interest
$
(11
)
 
$
(11
)
 
$
452

 
$
(441
)
 
$
(11
)
 
 
 
 
 
 
 
 
 
 
Comprehensive income/(loss) excluding noncontrolling interest
$
(50
)
 
$
(50
)
 
$
(922
)
 
$
972

 
$
(50
)

The Kraft Heinz Company
Condensed Consolidating Balance Sheets
As of October 2, 2016
(in millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuer
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
2,131

 
$
1,789

 
$

 
$
3,920

Trade receivables

 

 
855

 

 
855

Receivables due from affiliates

 
873

 
101

 
(974
)
 

Dividends due from affiliates
769

 

 

 
(769
)
 

Sold receivables

 

 
208

 

 
208

Inventories

 
2,061

 
1,047

 

 
3,108

Short-term lending due from affiliates

 
1,790

 
3,027

 
(4,817
)
 

Other current assets

 
2,037

 
423

 
(1,608
)
 
852

Total current assets
769

 
8,892

 
7,450

 
(8,168
)
 
8,943

Property, plant and equipment, net

 
4,236

 
2,254

 

 
6,490

Goodwill

 
11,093

 
33,425

 

 
44,518

Investments in subsidiaries
57,642

 
72,963

 

 
(130,605
)
 

Intangible assets, net

 
3,400

 
56,220

 

 
59,620

Long-term lending due from affiliates

 
1,700

 
2,000

 
(3,700
)
 

Other assets

 
548

 
961

 

 
1,509

TOTAL ASSETS
$
58,411

 
$
102,832

 
$
102,310

 
$
(142,473
)
 
$
121,080

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Commercial paper and other short-term debt
$

 
$
639

 
$
14

 
$

 
$
653

Current portion of long-term debt

 
2,028

 
19

 

 
2,047

Short-term lending due to affiliates

 
3,027

 
1,790

 
(4,817
)
 

Trade payables

 
1,982

 
1,474

 

 
3,456

Payables due to affiliates

 
101

 
873

 
(974
)
 

Accrued marketing

 
220

 
488

 

 
708

Accrued postemployment costs

 
150

 
14

 

 
164

Income taxes payable

 
576

 
1,174

 
(1,608
)
 
142

Interest payable

 
300

 
11

 

 
311

Dividends payable
769

 

 

 

 
769

Dividends due to affiliates

 
769

 

 
(769
)
 

Other current liabilities

 
873

 
291

 

 
1,164

Total current liabilities
769

 
10,665

 
6,148

 
(8,168
)
 
9,414

Long-term debt

 
28,970

 
1,010

 

 
29,980

Long-term borrowings due to affiliates

 
2,000

 
1,917

 
(3,917
)
 

Deferred income taxes

 
1,104

 
19,602

 

 
20,706

Accrued postemployment costs

 
2,100

 
267

 

 
2,367

Other liabilities

 
351

 
394

 

 
745

TOTAL LIABILITIES
769

 
45,190

 
29,338

 
(12,085
)
 
63,212

Redeemable noncontrolling interest

 

 

 

 

Total shareholders’ equity
57,642

 
57,642

 
72,746

 
(130,388
)
 
57,642

Noncontrolling interest

 

 
226

 

 
226

TOTAL EQUITY
57,642

 
57,642

 
72,972

 
(130,388
)
 
57,868

TOTAL LIABILITIES AND EQUITY
$
58,411

 
$
102,832

 
$
102,310

 
$
(142,473
)
 
$
121,080

The Kraft Heinz Company
Condensed Consolidating Balance Sheets
As of January 3, 2016
(in millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuer
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$

 
$
3,189

 
$
1,648

 
$

 
$
4,837

Trade receivables

 
62

 
809

 

 
871

Receivables due from affiliates

 
555

 
319

 
(874
)
 

Sold receivables

 
554

 
29

 


 
583

Inventories

 
1,741

 
877

 

 
2,618

Short-term lending due from affiliates

 
3,657

 
4,353

 
(8,010
)
 

Other current assets

 
645

 
443

 
(217
)
 
871

Total current assets

 
10,403

 
8,478

 
(9,101
)
 
9,780

Property, plant and equipment, net

 
4,518

 
2,006

 

 
6,524

Goodwill

 
10,976

 
32,075

 

 
43,051

Investments in subsidiaries
66,005

 
73,105

 

 
(139,110
)
 

Intangible assets, net

 
3,838

 
58,282

 

 
62,120

Long-term lending due from affiliates

 
1,700

 
2,000

 
(3,700
)
 

Other assets

 
534

 
964

 

 
1,498

TOTAL ASSETS
$
66,005

 
$
105,074

 
$
103,805

 
$
(151,911
)
 
$
122,973

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
 
 
Commercial paper and other short-term debt
$

 
$

 
$
4

 
$

 
$
4

Current portion of long-term debt

 
65

 
14

 

 
79

Short-term lending due to affiliates

 
4,353

 
3,657

 
(8,010
)
 

Trade payables

 
1,612

 
1,232

 

 
2,844

Payables due to affiliates

 
319

 
555

 
(874
)
 

Accrued marketing

 
359

 
497

 

 
856

Accrued postemployment costs

 
316

 
12

 

 
328

Income taxes payable

 
71

 
563

 
(217
)
 
417

Interest payable

 
386

 
15

 

 
401

Dividends payable

 
762

 

 

 
762

Other current liabilities

 
988

 
253

 

 
1,241

Total current liabilities

 
9,231

 
6,802

 
(9,101
)
 
6,932

Long-term debt

 
24,143

 
1,008

 

 
25,151

Long-term borrowings due to affiliates

 
2,000

 
1,905

 
(3,905
)
 

Deferred income taxes

 
1,278

 
20,219

 

 
21,497

Accrued postemployment costs

 
2,147

 
258

 

 
2,405

Other liabilities

 
270

 
482

 

 
752

TOTAL LIABILITIES

 
39,069

 
30,674

 
(13,006
)
 
56,737

Redeemable noncontrolling interest

 

 
23

 

 
23

9.00% cumulative compounding preferred stock, Series A
8,320

 

 

 

 
8,320

Total shareholders’ equity
57,685

 
66,005

 
72,900

 
(138,905
)
 
57,685

Noncontrolling interest

 

 
208

 

 
208

TOTAL EQUITY
57,685

 
66,005

 
73,108

 
(138,905
)
 
57,893

TOTAL LIABILITIES AND EQUITY
$
66,005

 
$
105,074

 
$
103,805

 
$
(151,911
)
 
$
122,973


The Kraft Heinz Company
Condensed Consolidating Statements of Cash Flows
For the Nine Months Ended October 2, 2016
(in millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuer
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
 
 
 
 
Net cash provided by/(used for) operating activities
$
1,636

 
$
1,821

 
$
1,045

 
$
(1,636
)
 
$
2,866

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
Capital expenditures

 
(605
)
 
(231
)
 

 
(836
)
Proceeds from net investment hedges

 
84

 

 

 
84

Net proceeds from/(payments on) intercompany lending activities

 
565

 
(74
)
 
(491
)
 

Additional investments in subsidiaries

 
(10
)
 

 
10

 

Return of capital
8,987

 

 

 
(8,987
)
 

Other investing activities, net

 
41

 
(31
)
 

 
10

Net cash provided by/(used for) investing activities
8,987

 
75

 
(336
)
 
(9,468
)
 
(742
)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
Repayments of long-term debt

 
(69
)
 
(5
)
 

 
(74
)
Proceeds from issuance of long-term debt

 
6,978

 
3

 

 
6,981

Proceeds from issuance of commercial paper

 
4,296

 

 

 
4,296

Repayments of commercial paper

 
(3,660
)
 

 

 
(3,660
)
Net proceeds from/(payments on) intercompany borrowing activities

 
74

 
(565
)
 
491

 

Dividends paid-Series A Preferred Stock
(180
)
 

 

 

 
(180
)
Dividends paid-common stock
(2,123
)
 
(2,303
)
 

 
2,303

 
(2,123
)
Redemption of Series A Preferred Stock
(8,320
)
 

 

 

 
(8,320
)
Other intercompany capital stock transactions

 
(8,320
)
 
10

 
8,310

 

Other financing activities, net

 
50

 
6

 

 
56

Net cash provided by/(used for) financing activities
(10,623
)
 
(2,954
)
 
(551
)
 
11,104

 
(3,024
)
Effect of exchange rate changes on cash and cash equivalents

 

 
(17
)
 

 
(17
)
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
Net increase/(decrease)

 
(1,058
)
 
141

 

 
(917
)
Balance at beginning of period

 
3,189

 
1,648

 

 
4,837

Balance at end of period
$

 
$
2,131

 
$
1,789

 
$

 
$
3,920

The Kraft Heinz Company
Condensed Consolidating Statements of Cash Flows
For the Nine Months Ended September 27, 2015
(in millions)
(Unaudited)
 
Parent Guarantor
 
Subsidiary Issuer
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES
 
 
 
 
 
 
 
 
 
Net cash provided by/(used for) operating activities
$
180

 
$
(88
)
 
$
834

 
$
(180
)
 
$
746

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
Capital expenditures

 
(181
)
 
(185
)
 

 
(366
)
Proceeds from net investment hedges

 
481

 

 

 
481

Net proceeds from/(payments on) intercompany lending activities

 
721

 
(346
)
 
(375
)
 

Payments to acquire Kraft Foods Group, Inc., net of cash acquired

 
(9,535
)
 
67

 

 
(9,468
)
Additional investments in subsidiaries
(10,000
)
 

 

 
10,000

 

Return of capital
997

 
5

 

 
(1,002
)
 

Other investing activities, net

 
(34
)
 
(14
)
 

 
(48
)
Net cash provided by/(used for) investing activities
(9,003
)
 
(8,543
)
 
(478
)
 
8,623

 
(9,401
)
CASH FLOWS FROM FINANCING ACTIVITIES
 
 
 
 
 
 
 
 
 
Repayments of long-term debt

 
(12,282
)
 
(26
)
 

 
(12,308
)
Proceeds from issuance of long-term debt

 
14,033

 
790

 

 
14,823

Net proceeds from/(payments on) intercompany borrowing activities

 
346

 
(721
)
 
375

 

Proceeds from issuance of common stock
10,000

 
10,000

 

 
(10,000
)
 
10,000

Dividends paid-Series A Preferred Stock
(540
)
 

 

 

 
(540
)
Dividends paid-common stock
(637
)
 
(1,177
)
 

 
1,177

 
(637
)
Other intercompany capital stock transactions

 

 
(5
)
 
5

 

Other financing activities, net

 
(95
)
 
(52
)
 

 
(147
)
Net cash provided by/(used for) financing activities
8,823

 
10,825

 
(14
)
 
(8,443
)
 
11,191

Effect of exchange rate changes on cash and cash equivalents

 

 
(397
)
 

 
(397
)
Cash and cash equivalents:
 
 
 
 
 
 
 
 
 
Net increase/(decrease)

 
2,194

 
(55
)
 

 
2,139

Balance at beginning of period

 
541

 
1,757

 

 
2,298

Balance at end of period
$

 
$
2,735

 
$
1,702

 
$

 
$
4,437